Market Analysis

The US Treasury bond market was down earlier today (slightly higher yields/rates) and is now flat. The Fannie Mae and Freddie Mac mortgage-backed securities (MBS) have been relatively flat but are improving slightly in afternoon trading. The stock market is up.

Below are the key items on this week’s economic calendar:

Monday, November 23, 2009

• October Existing Home Sales – up 10.1% vs projections of a 1.4% increase.
• $44 Billion 2 Year US Treasury Note Auction - the auction results were strong with a 3.16 bid/cover ratio ($3.16 in bids for each $1 being auctioned). The bid/cover ratio of 3.16 was down from 3.63 from October’s $44 Billion auction, but is still far above the long-term average of 2.33.

Tuesday, November 24, 2009

• 1^st Revision 3^rd Quarter GDP - expected to be revised down from 3.5% to 2.8%.
• September S&P Case-Shiller Home Price Index – expected to show year over year prices down approx 9% from 11.32% in August.
• November Conference Board Consumer Confidence Index – expected 47.0 vs 47.7 in October.
• $42 Billion 5 Year US Treasury Note Auction
• Minutes of Federal Reserve Board’s Nov 3-4 meeting released – investors will be looking for any signs that the Fed may continue its mortgage-backed security purchase program.

Wednesday, November 25, 2009

• October Personal Income/Spending/PCE Index – Income expected up .2% vs September unchanged. Spending expected up .5% vs September down .5%. PCE (personal consumption expenditure) Index up .1% vs September up .1%.
• October Durable Goods Orders - expected .5% increase vs 1.4% in September
• Initial Jobless Claims week ended 11/21 – expected down 5,000
• October New Home Sales – expected up 1.9%
• University of Michigan/Reuter’s Consumer Sentiment Index – expected 67.0 vs early November 66.0
• $32 Billion 7 Year US Treasury Note Auction